All About the (Private) Benjamins

Lets get this out of the way upfront: there is no way to objectively calculate what military members “deserve.” Military life can be rough even in peacetime, and the risk and sacrifices expected of military members are even greater during war, or whatever we’re calling this thing now. But it’s misleading to say it’s all sacrifice.

Here is the bottom line on active duty military pay and benefits.  They are much, much, much better than anyone realizes, and by “anyone” I really mean anyone. Pay and benefits are probably the best-kept secret in the military and over the last 12 years they have increased at a substantial rate.  The Tenth Quadrennial Review of Military Compensation from February 2008 states that

…compensation for members of the uniformed services compares favorably to compensation in the civilian sector, and the differential is substantial when the comparison includes not only cash compensation but also elements of a generous benefits package. But this fact is not well understood by service members in general. While service members tend to understand that their cash compensation compares favorably to the cash earnings of comparable civilians, they do not appreciate the full extent to which their total compensation—including benefits—exceeds that of their civilian counterparts.  

This widespread ignorance is problematic for a couple reasons.  First, it contributes to military personnel making career decisions without fully understanding what life is like outside the military.  Second, it feeds into the myth amongst the military, the general population, and Congress that every facet of military existence is perpetual sacrifice and that the least we can do is pay them more. On several occasions this has even led to Congress tagging an additional 0.5%* across the board pay increase beyond what the Pentagon requested (FTR, this happened under both Bush and Obama).  This mentality also discourages us from facing the uncomfortable truth that money put into personnel compensation may be more advantageously spent elsewhere.

Complicating all of that is the convoluted nature of the military compensation system. Pretty much everyone who has studied this issue has stated, in varying degrees, that the compensation system is too complicated to allow for sound policy decisions: the Government Accountability Office, the Congressional Budget Office, the Congressional Research ServiceRAND (in at least two reports).  Even the Department of Defense says as much in the most recent QRMC and the Defense Advisory Council on Military Compensation.   (it should be noted that most of these documents explicitly avoid answering the question ‘How much should we pay the military?’)

So let’s try to break it down a bit. Every report on this topic utilizes a slightly different formula to calculate military compensation, but I’m primarily using the graphics from the 10th Quadrennial Review of Military Compensation, published in February of 2008. Yes, surprise! This is enough of an issue that there is a statute that every four years the President must establish a committee to study the topic and report back to him (incidentally, I’m also enough of a nerd to know that the 11th QRMC has been delayed – my guess is to assure that its findings align with the new fiscal realities within the department).

So, here is what military compensation currently looks like…

Why is this important? Because any time you hear someone talking about military “pay” (basically the right hand side of the pie chart) they are essentially ignoring over half of the monetary value that military members receive.

The term used to describe this 48% of the pay and benefits pie is RMC, meaning “Regular Military Compensation.”  After controlling for education, the military is consistently higher than the 70th percentile of earned income.  Relatively to this 70th percentile metric, officers have it slightly better than enlisted.

A couple of things to point out in these graphs; First off, for both officer and enlisted there is a steady, predictable increase in take home income.  This, of course, will vary somewhat from individual to individual, but based on the fairly standard promotion timelines for service members (especially officers), the military provides an income that places them in the upper levels of their social cohort for the duration of their career.  Keep in mind, all of this is before you include the Deferred and Noncash benefits.

You should also note that for the “typical” young enlisted member in the top chart (18-yo, without college) the military provides an additional $10,000 a year over what they could anticipate earning as a civilian for the first few years of their career.

All of this paints a picture of a fairly well compensated military force relative to the general population of the country.  However, once you include the monetary value of the additional benefits (the left-hand side of the pie chart above) the picture changes considerably.  The term used for the inclusion of the entire benefits and compensation package is MAC: “Military Annual Compensation.”

The income percentile for the military, both officer and enlisted (blue line), jumps up to between the 80th and 90th percentile for the majority of a 20 year career.  At the start of an enlisted career, the service member is actually exceeding the 90th percentile income bracket for his cohort.  For officers, the movement into the 90th percentile occurs both at the beginning of a career and again beyond the 18-year mark.

So, how well paid is the military? Even if you take out all the Noncash and Deferred benefits listed above and just focus on take-home pay, the military still has it pretty good.  There is a longer discussion to be had over the “deferred benefits” (aka retirement), which I discussed at length here and here).  But there is a natural tendency to focus on the “take-home” salary of military members – and by doing so, we are inadvertently contributing to a continued narrative of the military being underpaid.

So aside from demonstrating how much I hate America and setting myself up for a brutal comment section, what am I trying to accomplish here?  I’m not advocating that we reduce the take-home pay of military members, but we do need to take steps to convey to military personnel, the public and Congress exactly how well compensated the military is relative to the rest of the population.  This means taking some basic steps like simplifying the compensation system and updating servicemembers’ LESs so that the monetary costs of benefits is reflected.

In addition, we also need to assure that we are clear-eyed about the impact compensation packages have on the overall budget.  Military compensation, like all government spending, should be limited to the minimum amount necessary to achieve goals; in this case the maintenance of a certain quality of life for the All Volunteer Force.  The problem is that this has to simultaneously be balanced with the need to maintain adequate personnel numbers and sustain retirement benefits.  Unfortunately, no one seems to really want to delve into what that actually means.

For example, in 1999 there was a push to address a “13% pay gap” between the military and their civilian counterparts. The problem is that this number seems to have been largely arbitrary and not the result of a serious analysis (if someone has a study reference for this, please point me to it).  On the contrary, the 13% pay gap was actually refuted fairly convincingly at the time by the CBO.  Regardless, this lead to a new law that authorized Congress to increase that annual military pay raises by an additional 0.05% beyond the Employment Cost Index every year for the next 6 years in an effort to close this (questionable) gap. [The Employment Cost Index is set by the Bureau of Labor Statistics and is the baseline for annual raises for all federal employees including military]

However, when the six years was over, Congress continued to fund this additional 0.5%* for several more years, even though there was no longer any legal requirement for it and the Pentagon was no longer even requesting it. [In the interest of full disclosure, I personally benefited from several of these pay raises and never once complained]

There are a few indications that the attitude towards pay and benefits is starting to change.  The Pentagon has made long overdue changes to the costs of Tricare for both Active Duty and working age retirees.  They have also begun prorating ‘Imminent Danger Pay,’ which may have been the single most abused benefit in the history of the DoD.  Basically, if you spent a single day out of the month in a hostile area, you were paid an additional $225/month.  This meant that the entire military rushed to make it into theater before the end of the month and drug their feet in order to stay in theater until the 1st day of the next month.  A finance officer relayed the story of one senior USAF official who made 6 trips into theater in one year, each trip approximately 60 days apart, but conveniently straddling the monthly transition. That means he made an extra $2700 ($225 x 12) that year for a spending a just few weeks in theater (also all tax free if I recall the rules correctly)

I sincerely don’t want to oversimplify this issue.  There are myriad reasons why people join the military along with a largely different set of reasons for why they stay. An aspect of that decision is certainly financial.  However, to act as if the only way to maintain the status of the all-volunteer force is by perpetually increasing the compensation and benefits for military service members is an indictment of our policy makers’ ability to make sound fiscal judgments and an insult to uniformed personnel.  The compensation policies we have pursued over the last decade imply that we think service members are solely motivated by personal financial gains.  Let me assure you, this is not true, but the question remains; how much is too much?  Where do we draw the line?  How much do you pay people when it’s impossible to objectively determine what they deserve?

Also, if you are one of those people who breathlessly criticize slowing active duty military compensation growth and reductions in retiree benefits and the drawdown of personnel, you need to come to grips with the fact that all of these items come from the same ‘pot’ of money.  Since it’s now becoming clear that the DoD is going to face a truly flat budget over the next few years that means that this ‘pot’ can no longer grow at the unchecked rates it has over the last decade.  That means that from here on out, every dollar that goes into active duty compensation or retiree benefits is a dollar that doesn’t go into maintaining the size of the active duty force.  Secretary Panetta has announced the planned drawdown of 80,000 from the Army and 20,000 from the USMC.  Ostensibly, this is because we no longer need to sustain forces at these levels, but you have to ask if it is possible that we might “need” these personnel a little more if we could afford to keep them.

UPDATE:

* Thanks to Justin T. Johnson (@justinjdc) for pointing out that my pay raise number should have been 0.5%, not 0.05%.

This entry was posted in Big Money, Careerism, Military, War. Bookmark the permalink.

42 Responses to All About the (Private) Benjamins

  1. Daniel says:

    Well done. Any chance we can get a follow-up piece on federal civilian retirement benefits? I’m a bit biased because I’m in the guard with plans to switch to federal after school and it’d be nice to know if it’s more beneficial to try for both (full mil. retirement +fed civilian job) or just hop in head-first to federal civilian.

    • Jimmy Sky says:

      Daniel: This is a macro-level view on military compensation and benefits. I’m not the person to talk to on how to maximize your personal retirement account (especially if it involves the National Guard, whose personnel policies are mind-bending to me). I’d recommend you make an appointment and talk to your finance office.

  2. Travis says:

    I’m an entry-level federal civilian employee, and retirement is nothing remotely as generous as the military system. It’s a three-part program: We participate in Social Security, have a modest defined-benefit pension and pay into a defined-contribution plan with matching, somewhat akin to a private sector 401k.

    • Jimmy Sky says:

      True, there are substantial differences between military retirement benefits and those of other federal agencies/departments. However, other fed agencies are fundamentally different with regards to commitment and expectations, so there is pretty clear justification (IMO) of having a separate system for the military.

      Personally, I think that system is flawed and should be altered, but I do not think that having the same retirement system as Health and Human Services (for example) is the correct approach either. http://gunpowderandlead.org/2011/09/silent-majority/

  3. @forbesmm says:

    (1) You clearly hate The Troops, and are probably a communist.

    (2) I agree with nearly everything you’ve written here. I find the perennial congressional practice of knee-jerk pay raise bills, and the exploitation of support or opposition to those bills as a political club with which to beat one’s opponent, condescending and distasteful. Which isn’t to say that I haven’t taken every single one of those raises with a smile on my face. But I agree that we may be at the point now where we could level off basic pay and be fine for a while.

    I have a couple issues with the compensation pie chart: first, what is that 20 billion or so in “other non cash” benefits? That’s a huge amount, and I’m curious to know what’s included in that. Second, the “deferred” portion includes mutually exclusive benefits: retirement pay/health care, and VA benefits. Am I correct in my assumption that no one person could qualify for both at the same time? This is fine, because the chart is designed to show where DoD’s dollars go, but it would be a mistake to interpret it as an accurate reflection of any individual service member’s compensation (i.e., RMC is actually somewhat more than half of total compensation, not less).

    Also, you refer a few times to what service members “deserve” and that one of the goals of compensation is to maintain a certain “quality of life.” I would argue that misses the point. What soldiers deserve or not is a philosophical question, not a policy question, and the military quality of life is the “ways” to achieve the “ends,” not the end itself. The ends are national security, defense of the constitution, pursuit of foreign policy interests–big idea stuff like that. More relevant to this discussion, the more proximal “ends” are recruiting and retention. And say what you will about patriotism, but nobody would volunteer to serve if it were an unpaid gig. Not for very long, anyway. The fact that there are intangible motivations to serve just means that the market price DoD has to pay for its personnel goes down a bit.

    So what’s the market price for an infantryman? An intelligence officer? A truck driver? A linguist? Answer: whatever brings them in and keeps the desired percentage for as long as needed. Yes, that’s circular. But what I mean is: the proof is in the effects. All this talk about percentiles and comparisons to the private sector mean jack shit if we’re not recruiting and retaining the number we need.

    Which brings me back around to what was your final point also: if what we have now is “too expensive,” then perhaps we should reevaluate how large a force we actually need. (or sacrifice some big-ticket programs to pay for it)

    • Jimmy Sky says:

      (1) Da.

      (2) I’ll let the first paragraph, the one where you agreed with “nearly everything,” stand.

      Graf 2: I’ll update tomorrow with an expansion on the overarching pie chart. You aren’t the only person to point out issues with it, so I will attempt to clarify later. As you can imagine, reducing military compensation to a single pie chart is pretty difficult and the original report had more caveats and a much longer explanation than I included here.

      Graf 3: My use of “deserve” was an attempt to avoid having that discussion at all. However, I think you wrote it very well here:
      What soldiers deserve or not is a philosophical question, not a policy question, and the military quality of life is the “ways” to achieve the “ends,” not the end itself. The ends are national security, defense of the constitution, pursuit of foreign policy interests–big idea stuff like that. More relevant to this discussion, the more proximal “ends” are recruiting and retention.
      I actually agree with you on this, but I think that it is a topic that is rarely spoken about so bluntly. I can’t imagine a senior military leader or an elected official talking about military compensation like this.

      Graf 4: There is a lot to unpack in here and it is kind of circular, so I’m going to let this one go.

      Graf 5: Agree (kind of), but you have to be cautious of letting budget drive force size. My argument is that we have gotten to the point where budgetary constraints may force us to field a force smaller than needed. You state, “…perhaps we should reevaluate how large a force we actually need”. My guess is you actually mean something along the lines of, “we should reevaluate the *missions* we prepare for” (which could impact the number of personnel needed).

      FTR, I’m also good with sacrificing ‘big-ticket programs,’ but realistically we are at the point where a lot of the truly unnecessary ones have been killed. I think the next round of cuts will focus on locations and consolidation of functional areas across Services.

  4. Pingback: An ecclectic view of the conundrum that is #Afghanistan. « Concise Magazine

  5. Dave says:

    Only one little problem with your analysis – you have a fatal flaw in logic. But this one fatal error castrates your thesis: You dare to compare military service to a civilian job. You can’t compare them because they don’t compare – “apples to anvils”. But to actually comprehend, you had to be there…

    • Jimmy Sky says:

      I was knew I would get at least one of these comments. Thanks for assuring I didn’t break my streak.

      • Chris says:

        Make that two.

        “So, how well paid is the military? Even if you take out all the Noncash and Deferred benefits listed above and just focus on take-home pay, the military still has it pretty good.” Except for that whole ‘being blown up and shot at’ thing.

        Here’s a goofy idea: only give incentive pay to senior officers during peace-time. Give enlisted combat pay. Senior officers should have incentive to formulate policy with the goal of *ending* combat. Junior enlisted should be paid enough so their families don’t qualify for food stamps or low income housing.

        I am ex-Navy enlisted, service from ’77-’84. Without base housing my wife and I could only afford to share a house with another couple. I really hope things have changed asignificantly, though your graphs are from 2006.

        • Jimmy Sky says:

          RE: ‘being blown up and shot at’ — I acknowledge this very point in Graf 1: “there is no way to objectively calculate what military members “deserve.” Military life can be rough even in peacetime, and the risk and sacrifices expected of military members are even greater during war, or whatever we’re calling this thing now.”

          RE: “Junior enlisted should be paid enough so their families don’t qualify for food stamps or low income housing.” — Per 2008 QRMC/GAO charts (included in the post) the average junior enlisted starts out north of $30k. This means that w/o extenuating circumstances, they will not qualify for most low income programs.

          Given the time of your service (77-84), your perspective on this may be somewhat skewed. There were historical instances where military pay, especially for enlisted, were probably too low. This has shifted substantially since the early 80′s. Also, my graphs are from 2006 since they formed the basis from the last QRMC. When the next one comes out (later this year), I’ll post an update and include the new charts. However, given the continued pay raises since 2006 and the economic collapse in 2008, it is guaranteed that updated figures would further support my position.

          • nitpicker says:

            For the record, one of my best friends was a member of the Air Force band for 26 years. He never left Washington, D.C., and never had even the slightest chance of doing so. Yet he’s retired with the same benefits of a combat soldier and disability from carrying a tuba. So, no, not all of us have been “shot at.”

            The corrective to this, then, is to offer different retirement benefits and levels for different jobs and types of tours. If you worked behind a desk in the States your whole career, you get, say, half of what someone who spent a quarter of their career in combat zones gets. You could even include the Guard and Reserve in this system, creating a single retirement type: If, as a so-called “weekend warrior,” you faced multiple deployments, shouldn’t you get something more like the active duty retirement?

            There are lots of changes that need to be made to this system. Period.

        • theod says:

          So how many times were you shot at or at real risk of being blown up (by an enemy, not your colleagues) during your Navy career? The vast majority of military members, of course, are never in harm’s way….and seem to prefer it that way. Especially the brassiest among them.

          • Jimmy Sky says:

            Despite the fact that this actually has nothing to do with my argument, I was an officer in the Air Force for 7 years in the Security Forces career field (similar to an MP in the Army). During that time I conducted nuclear security, physical security, law enforcement and a staff tour. For 5 of my 7 years I armed up every day I was on duty. I deployed to Iraq twice (2003, 2006) and I consider myself amazingly lucky to have never gotten hit by an IED while on a convoy or a mortar while on the FOB.

            Also, to my knowledge I was never shot at by any of my colleagues, regardless of their service affiliation, but I do have a funny story about a Navy Captain taking a swing at me with a baseball bat.

          • Chris says:

            Closest I came to “harm’s way” was Shore Patrol duty on the bus hauling drunk Marines back from Anderson AFB to Big Navy on Guam. Us squids and the civilian bus driver understood our standing orders to be, “bail out of the bus at the least sign of trouble, and call for backup from real police.” And then there was that brush fire our gung-ho commander made us go and beat out, while the civilian base fire fighters sat on their butts and waited for the afternoon rains to take care of the issue. Regardless, I never drew a penny of combat pay because I never saw duty in a combat zone. That didn’t mean anything to the Puerto Rican separatists who attacked a bus-load of CTs and killed two.
            The point is that nowhere in the civilian world do you pledge to obey the orders of ‘superior officers’ up to and including doing really dangerous things that could kill you, all the while giving up your rights as an American citizen. Police go in harm’s way but they aren’t subject to the whole ‘nother set of rules that is the UCMJ. Ditto for firefighters and other civilian public safety folks. So drawing an equivalence between civilian pay and military compensation is a bunch more convoluted than simple job code comparison.
            Also as another poster notes, comparing senior NCO/officer jobs with civilian jobs on a simple years-of-employment basis neglects the apples-to-apples examination of how these jobs might actually equate, the ‘being blown up and shot at’ thing notwithstanding.

  6. Joe says:

    I would be interested in seeing how the value changes for those who choose to leave the military prior to retirement – and thus get none of the deferred compensation that makes up a stunning 31% of calculated compensation. Also, to what degree does the relative compensation depend on using the accrued benefit? For example, I may have compensation referred to as “education” but that benefit is lost if not used within some time frame, so should at least be discounted from regular cash compensation and possibly disregarded totally. Thoughts?

    • Jimmy Sky says:

      Others have also pointed out some perceived inconsistencies in the pie chart, primarily WRT the deferred benefits. I’ll update the post later this week (or just do a new one) and go more detailed into the methodology that the GAO and QRMC used to calculate.

  7. nitpicker says:

    This is an important post, especially now, when people are using the threat of possible increases in military retirees’ healthcare premiums to smear Obama as choosing to “gut military healthcare in favor of Obamacare.” We’re a retired military family and we pay $40 a month for the health insurance for a family of five. We’re not among the top tier of earners, so the increases–brought about by the failure of the deficit “supercommittee”–would result in us still paying less than $80 a month. For those senior officers making over $48,000 a year from their retirement pay, it would come to about $130. Meanwhile, a study from 2010 showed the average American family’s premium to be over $1000. With copays, which we also don’t have.

    All you will see in the paper, however, is the percentage of the increase–90-345%–which sound so much worse, until you figure out what those final costs would actually be.

    Keep it up!

    • Jimmy Sky says:

      Thanks. I appreciate hearing from readers like you who are willing to support my arguments with real world examples.

      • nitpicker says:

        I appreciate writers who have the cojones to take on issues that have been demagogued to high heaven. Good on you.

    • Michael says:

      Well I don’t know how you are getting away with it by we have a $12 co-pay every time we step foot into a Doctor office, or physical therapy. The monthly premium is low but still higher that what was promised to me in 1981. As far as this article goes I agree that the military receive a good package and if used wisely is sufficient. For an enlisted person in the Army who will get promoted to SGT in just 3 or 4 years that is a 100% pay raise, find another enterprise that doubles the pay of their entry level in such a short time if you can find one that does at all. The deferred benefits only goes to those that retire. As well the chart is misleading it gives housing a cash component and a non-cash component, you only receive one of them. Now with turning the housing over to a private company individuals with dependents receives the cash which they turn over as rent to the private company and housing is provided to Single Soldiers who live in the barracks. I am a working retiree and I only use my retiree medical benefit because I can’t afford to pay the other rate of over 600/month.

      The other side of this raising the Tricare Prime premium once means that it can then be raised over and over. Promises to the military retiree is only good so long as a single group of elected officials are in office once they leave another set comes in and they can choose to change the rules that we live by.

  8. WB says:

    I think this piece is right on. I started working at an Air Force base as a civilian a few years ago and discovered the very nice rate of military compensation to my surprise. And the medical care is a HUGE thing compared to civilian insurance. One of my favorite stories: I was riding home from work with a friend of mine who was a major at the time, and it was right in the middle of the Affordable Care Act debate. He turned to me in the car and said, “So can you tell me how health insurance works?” He didn’t mean my plan. He had no understanding at all of a system where you have to pay part or all of medical costs. He was simply used to going to the military docs, getting what he needed, and paying nothing. Nothing.

    • Jimmy Sky says:

      Arguing the politics of social programs can sometimes be challenging with Active Duty personnel because they have often not had to deal with some of these issues at any time in their adult life.

  9. Michael W says:

    As a retired officer, I agree with everything you’ve said. I’ll just reiterate the facts regarding health care as well. My premium is $19.17 per month. With the plethora of military treatment facilities in the DC area I pay no/no co-pay. This is, quite frankly, something the country cannot afford. What’s the right price? Double, triple…actually probably quite a bit more than that.

    Yes, I did my share of deployments, moved around a lot, and, no doubt, have been a target on occasion. I wouldn’t have traded any of it. What I got out of it was far more than the tax-free Benjamins.

    Earlier commenters have mentioned the ‘lost’ benefit of deferred compensation for anyone not serving 20 years. Secs Gates and Panetta noted this incongruity and it would go a long way toward rectifying our retirement system to make it at least partly contributory not to mention highlighting for the military members that deferred compensation is still compensation.

    • Colleen says:

      Yes, my husband and I were great savings for the military. I served 8, he served 12 and we both get nothing towards any retirement savings at all (and did I mention the housing… oh yes.) Not to mention the savings of not having to cover extra spouses under health care. You think with all the money the government saves in dual career active duty families they would be a tiny bit supportive of the concept. But, alas not one speck of support.

    • Jimmy Sky says:

      Thanks. I agree and truly appreciate your comments.

  10. Colleen says:

    Are you double counting? You either get base housing or a housing allowance. In the chart it seems to be counted both in cash and non-cash, but you wouldn’t get both. Even if you get temp quarters at a BOQ, you pay for it. Also, if you are married and both active duty you only get the housing qualified by the highest ranking member. In our case, that was my husband- submariner officer while I got nothing in housing even though I earned it through my service as well. (No, not bitter at all about it, why?) Also, the education benefit is sketchy. Does that include all schools? As a nuke sub guy, my husband had to go to all kinds of crazy specific schools for qualifications that do not benefit him in any civilian function. Even a class at the War College has only limited benefit for the service member. Yes, if you get a masters through the GI Bill that will benefit you greatly and should be counted as a benefit for you. If you qualify as Weps Dept head on a fast attack, that only benefits the military.

    • Jimmy Sky says:

      As I stated above, I owe you (and everyone else) a further explanation on the pie chart. Its pretty clear now from reader feedback that I didn’t include enough of an explanation of how it was calculated.

  11. Mike says:

    All of this begs the question: “How much is America willing to pay to maintain the best military in the world?”
    Your points about the increasing pay and benefits in the military over the past decade or so are accurate, but they lack historical context. Until the 1970s the military relied largely on conscription to fill the ranks. When you conscript people you can pay them a whole lot less and give them as little in the way of benefits as possible. When the draft went away the result was the infamous “hollow force” of the Carter era, which resulted in things like DESERT ONE, the aborted attempt to rescue American hostages held in Tehran. Ronald Reagan decided that the hollow force needed filling, and the only way to do that in a democratic and capitalist society is to compete with the private sector for the primary resource of people.
    Fast forward to today. We have been at war for over a decade, and many tens of thousands of military personnel have been killed or wounded. To ask people to volunteer for such a dangerous and arduous (try going on four combat tours in five years- trust me, it sucks) costs money and resources. It also requires the people of the United States to stand behind their promises: things like retirement, subsidized health care benefits, educational assistance and the like.
    So how much is that worth? Do you advocate bringing back the draft or seeing if cutbacks will maintain our current #1 spot in terms of national defense? A studied look is certainly necessary, but as one person said earlier, in many ways it is apples and anvils.

    • Jimmy Sky says:

      I appreciate you reading and taking the time to comment. Additionally, I commend you on your 25+ years of service to the Corps. However, your implication that any changes to our current compensation system equate to reinstating the draft is ridiculous on its face. The “studied look” you advocate in your closing sentence has been accomplished, multiple times by various organizations. While the results vary from study to study, they all indicate that the system can’t grow indefinitely, which has been the case over the last 12 years.

      All signs point to the DoD personnel budget being flat in the very near future. That means that senior leaders will have to make tradeoffs between force size and individual compensation and benefits, for both active duty and retired. Judging from the first round of cuts, (20k from USMC and 80k from Army) it appears that force size is being sacrificed. The question is how much smaller will these Services have to go in order to maintain the same level of benefit growth for the remaining active duty personnel.

      • Mike says:

        I agree wholeheartedly that the system cannot grow indefinitely. My point is simply how we got here; we have gone from a conscripted force to an all volunteer military in a relatively short period of time. The way that the United States military became the best in the world was by investing a large amount of treasure into the acquisition of people, and that investment has been in competition with industry and the rest of the corporate sector. The Eye of Sauron is now looking askance at how much the American taxpayer now devotes to the armed forces, and in particular the most expensive component (the people). My point is that we started with the draft and ended up where we are today as the government created a pay and benefits scheme that is indeed Byzantine in nature. My point is that you get what you pay for. If you want the best military in the world, then it is going to cost a lot. If you don’t, then you will end up with exactly what you pay for. My discussion of conscription is to provide context of the arc that this issue has taken, not as a possible result of cutting pay and benefits.

  12. Scott says:

    Clearly the medical coverage matters a lot in the overall value of military compensation, but that’s less a function of how much we pay the military vs. civilian pay as it is the rising cost of medical care across the board.

    That aside, I think there’s at least one flaw in your analysis, and that’s the absence of consideration of the success factor. There are few, if any, ‘unsuccessful’ military personnel with 20 years of experience, because the personnel management practices of the all-volunteer military largely prevent it. An enlisted person with 20 years experience is at least an E6 and, more likely an E7 or even an E8. That makes them a leader – effectively a manager – of at least a dozen people and, in some cases, hundreds of people. If you can’t attain a particular rank within a certain number of years, the military system forces you out.

    There are no 20-year military employees working in entry-level jobs. On the other hand, there are LOTS of 20-year civilian employees essentially working in entry-level jobs.You should be comparing apples to apples – how does the compensation of a military leader of 20 people, with X years of experience, compare to that of a civilian manager of 20 people with comparable experience? Similarly, with officers, a division commander is an executive leader of from 15,000 to 25,000 people – depending on the particular formation he/she commands – and you should be comparing that compensation with comparable civilian executives.

    • Adam says:

      This needs to be repeated. I don’t know everyone’s experience, but when I began my career as a military officer, my very first job was executive officer of a company with 106 people in it. I don’t know how many in my cohort of “just graduated from college” colleagues had anywhere near that level of responsibility. My wife, also an officer, signed for $40 million worth of equipment within a month of arrival at her first duty station.

      Sure, the jobs aren’t always like that. There are plenty of staff assistant positions where you’re sitting around doing nothing for months waiting to get a real job. Even so, private sector employers seem to value the experience. The Army was finding it damn near impossible up until 2009 or so to keep Captains because corporate recruiters were offering entry into executive training programs that promised enormous pay raises over what you earn to stay in – for people scarcely four years into service. It isn’t such a problem now that the job market soured, but it still makes me question whether someone is overpaid when private employers are willing to pay just as much or even more for the same person to do a similar job.

      Consider what some of these people actually give up to stay in for so long. You’ve got the Chief of Staff of the Army in nearly his 40th year of service overseeing more than million employees, a few trillion dollars worth of non-human assets, and a several-hundred billion dollar yearly budget, for what? About $250,000? Sure, that puts him at about the 3rd percentile or whatever of all income-earners in the U.S., but someone with that level of responsibility at an equivalently-sized private corporation would earn what? We can’t even compare because no such private corporation exists. I believe Citigroup has the most in assets at $2 trillion or so in an average year and Jamie Dimon earns $20 million a year. We’re saying General Odierno would earn close to one hundred times what he currently earns in regular compensation (CEOs get plenty of non-cash benefits, too) to oversee a smaller organization.

      Granted, not everyone is the Chief of Staff of the Army, but even the least accomplished of 20-year officers is a Lieutenant Colonel overseeing the military science department of a university somewhere. Is he earning more than the typical dean of a college? I doubt it.

      • Chris says:

        Thank you for amplifying this important aspect of the discussion.

      • Jimmy Sky says:

        Adam, I don’t have much to offer WRT your first two paragraphs. I agree, young officers are sometimes given a large amount of responsibility very early in their careers. Also, military experience is usually seen as valuable in the civilian sector.

        I’m not sure I follow your point about General Odierno. At the conclusion of a successful 40-year career culminating in being Chief of Staff of the Army he could make more as a civilian? Probably. He will also receive a very generous pension of 75% of his base pay for the rest of his life, and yet, he still shows up to the Pentagon every day. Maybe its not just about money?

    • Jimmy Sky says:

      Rising medical costs directly impact the relative difference between military members and civilian compensation.

      There are few, if any, ‘unsuccessful’ military personnel with 20 years of experience, because the personnel management practices of the all-volunteer military largely prevent it.

      In my experience, the amount of people “forced” out of the military due to incompetence (aka inability to test for the next rank) is so small as to be negligible.

      Your last paragraph largely describes what the QRMC/GAO studies did. As people moved up the experience chain, both in the military and civilian world, they were compared against their peers.

  13. RB says:

    Excellent article. As a retired AF medical service officer, I am happy to see other retirees on this comments section able to acknowledge (a) how good the health benefit is, and (b) how relatively fair the proposed fee increases are.

    One nitpick. You make the statement that the “Pentagon has made long overdue changes…to the health benefit.” No, they have PROPOSED changes. The Congress and beneficiary/veteran organizations are crying bloody murder, and it is looking like an uphill climb to get these very reasonable changes passed.

    You made a point that I don’t think enough people are making: Our (internal) ignorance about how good our total compensation package is can lead to some bad decision-making. If our service members actually believed the horses**t that their beneficiary organizations are making about proposed changes to compensation and benefits, they would leave the service in droves. We have an exceptional total package, particularly on health care. The irony is that some of the same people who are screaming about the travesty of Obamacare, are also the users of one of the most socialized health systems in the country – the military health system.

    One other nitpick: Your story about Imminent Danger Pay UNDERESTIMATES the benefits to service members, I believe. In addition to the $225 in danger pay, your ENTIRE monthly pay is tax free for that month…not just the $225. I am all for that tax break for the people deployed; the folks who fly in and out of these zones around the end/beginning of the month for tax benefit are the military version of welfare queens.

    Just an excellent article.

    • nitpicker says:

      You are correct. All money earned while deployed to a “hazardous duty” zone is tax-free.

    • Jimmy Sky says:

      Thanks. I was apparently mistaken that these Tricare changes had already been implemented. I appreciate the correction.

      I also agree that my explanation underestimates the benefits of Imminent Danger Pay. However, I wanted to leave that portion somewhat simple for readers that may not be familiar with the concepts. There is a rabbit hole regarding deployment benefits such as tax free and being “deployed” to Tampa that I didn’t want to go down.

  14. Ron says:

    Informative piece but it also does not take a lot of other things in account that really bother me when comparing military salaires and compensation to that of people in civilian sector:

    1. military paid for 24 hours per day, 7 days a week, 365 per year….there is no overtime, no comp time….you work 3 days straight over a holiday weekend…guess what…paycheck stays the same no matter if you normally work 7:30-4:30 M-F and end up doing an 80 shift this week or over weekend in addition to regular time.

    2. Volunteer military but once you are in…you are in…no such thing as deciding not to work today because you dont feel like it….or you dont like your job, your office, your boss…so you are going to quit. yes you can volunteer for some hellatious duty overseas or in combat zone to get away but just cant walk away from a bad situation at work or home like your civilian counterpart.

    3. Military members, especially now, have fewer chances at education than counterparts. Yes we get education benefits…but you have to be able to attend classes to take advantage of them. Even with the technology available today that was not even available to this extent before I retired in 2004….if you are deployed in combat operations…no chance of school, classes, professional training….you are humping a ruck, living in a tent if you are lucky, and focused on staying safe and completing your job as expected. I was in Air Force and spent more time deployed with Army and Marines than anyone else….and never had opportunity for education while deployed…never. Hell, never had email capability until my last rotation before retirement as I always work in secure locations with sensitive data…just dont have ability to drop an unclass network line where I was sent for emails and facebook…LOL

    4. Housing….you either get the allowance to allow you to live off post…or you get housing on post and lose your housing allowance….you dont get both…it is one or the other and the allowance is not enough to cover your rent downtown. It pays a PORTION of your housing and is computed based on how much a single room apt costs a military member on average. It does not cover your family needs…larger family needs more but that is not your housing allowance which is really just a subsidy to HELP OFFSET COSTS.

    5. The so called subsistence pay…yep, once again what they say it costs to feed a military member at chow hall each month if living on base and not taking care of themselves. Once again this pay is for the military member alone and does not provide enough to cover food and such for family members such as wife and children. Military gives you what they think you need as military member by their rates…but is not intended to cover your family. Case in point….I spent some time overseas in Korea…away from family as they were not allowed to be where I was sent. I had to get special permission for them to stay in the base housing near Wash DC while I was gone…and then the entire 15 months I was gone my subsistence pay was canceled….because it was for me and I was fed at a chow hall in Korea and there was no concern if that $125 per month…yep $125 per month was needed to help things out while I was gone for over a year.

    6. Civilians…civil service or not….dont typically get uprooted and sent around the world or country every 3-5 years no matter time of year for children in school, family sicknesses, ill parents, etc. yes you can put in for a waiver or delay but are nearly impossible as I tried with father in law dying of cancer…I was to be promoted to E8 and told I would be moving within few months….requests to perform First Sergeant Duties or others to stay in my current location denied…so I retired instead…father in law died before retirement and we stayed in location that we were both raised where both families are also located. I was lucky I was close to retirement or I would have been sent to my next assignment while my wife and children would likely stay behind after going through a 18 month long fight with cancer of her father, death, and grieving with her mother and brother who are all very close. Civilians dont get told where to go or when to go….yes in senior positions if you want to keep your career on track you might have to move……but this applies from E1 to O6 equally in military…there is no comparison.

    While you covered the generalities well…I think it skirts the other responsibilities and hardships put on military members for serving their country….which are much more pronounced as the rank is lower. I retired in 2004 as E7 because I would not serve an additional 3 years in military to keep E8….my income was in mid-50s…if you added my other pay and benefits it was in 60s after 20+ years of service and a chest full of ribbons and medals for operations many never heard of away from my family and missing 90% of my two daughters as they grew into teenagers and now adults. Yes I get medical….but I pay hundreds of dollars a month for my TriCare……yes I get dental but still pay every month for that luxary…..yes I get a retirement but you cant retire on it….it covers a portion of my mortgage but that is all…..I get no education any more as I was a VEAP service member that could not afford to pay that money up front back in 80s…with a new wife and new baby and $50 per month left over after my monthly pay was distributed to bills…that was with no drinking, no movies, no activities other than family time alone overseas in Holland…..no car (rode bicycle 20 km to work every day as could not afford car). Luckily the Chapter 33 Post 9-11 education benefits were released though not heavily advertised….I put in and was awarded some benefits that allowed me to finish my college degree after 24 years of trying to do it….but otherwise I had no benefits through VEAP and the period they offered a conversion I was deployed into an area and not able to make the move to New GI Bill.

    So while I am grateful for my service to my country…..you by no means get rich…live the dream…or get a free ride based on military pay. I also take exception when they compare the pay and benefits of the military vs other civilians including civil service and make it sound like we should be equal. no we shouldnt….start sending your AAFES employee, teacher, secratary, and civil service employee overseas into combat away from their families and with no special pay or privelages above what is given our most junior enlisted member…and then start talking to me about “the military is paid better than they realize”…. This is from enlisted point of view….as the pay for officers especially senior officers is very different and much higher and offsets the numbers and I agree are more equivalent to their civilian counterparts. But as an example…we hire college graduates straight from school with no experience other than internships for salaries in mid to upper 50s….and sometimes low 60s. Salaries in the $40-50k range are common especially in IT or other specialized fields. That is what I started making upon retirement after serving my country for 20+ years…….. $60k per year plus the addition of my retirement which ended up being about $1000 per month after taxes. Sounds like while the military has made improvements…..I still cant see the equity when you count it for a 24 hour per day commitment with combat, separation from family, and restricted rights that those in civilian sector most likely will never have to encounter.

  15. John Edmondson Jr says:

    How about comparing apples to apples. How many of the civilian emploies are on salaried jobs verses hourly wages? I served 26 years on activite duty and not once made over time pay. You can’t compare a 40 hour 9-5 job to a military members. We do not work 40 hour weeks in peace or war. We rarely work 9-5. Every benefit and pay is EARNED!!! You need to look at the death rate of military compared to civilian. Look at the deviorce rate. You need to try walking a mile in there boots if you could.

Comments are closed.